A company based in Thailand has a Vietnamese subsidiary. The subsidiary generates 215232 VND a year, received in equivalent four installments. The Thai company wishes to convert the Vietnamese Dong cash flows to Thai Baht four times a year. It plans to engage in a cross-currency swap in order to lock in the exchange rate at which it can convert the Vietnamese Dong to Thai Baht.

The current exchange rate is 803 VND/1 THB. The fixed bid and ask rates on a plain vanilla currency swap in Thai Baht is 3.0 % - 3.2 % per year, and the fixed bid and ask rates on a plain vanilla currency swap in Vietnamese Dong is 5.5 % - 5.7 % per year.

1Determine the notional amount in Vietnamese Dong and Thai bath for the swap.

2) calculate the swap cash flow in Vietnamese Dong and Thai bath for the first installment as a result of the cross-currency swap

3) calculate the effective exchange rate in the format of (VND/THB 1) as a result of the cross-currency swap.